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<br /> <br />VIII. PO~ER REPAYMENT STUDIES <br />A. Repayment Criteria. Power repayment studies are used to <br />determine whether power revenues are sufficient to pay all costs within the <br />prescribed time periods. Repayment criteria are based on law and policies <br />established in DOE Order No. 6120.2. Public Law 84-485 provides that power <br />revenues must pay all annual power OM&R costs and all annual storage unit <br />irrigation OM&R costs except those paid by M&I revenues, and must repay with <br />interest within 50 years the capital investments allocated to power; repay <br />without interest within 50 years the irrigation investment of the storage <br />units, except for the portion repaid by M&I revenues; and repay without <br />interest within 50 years plus development periods all irrigation investments <br />of the participating projects beyond the ability of the water users to repay <br />and which are not repaid by M&I revenues. Also, in accordance with Public <br />Law 93-320, power revenues must be sufficient to pay the salinity control <br />construction and OM&R costs which are allocated to the Upper Colorado River <br />Basin. <br /> <br />For each year of the repayment studies, available revenues are first <br />used to pay annual expenses. Remaining power revenues are then applied to <br />repay the highest interest-bearing investments first, to the extent <br />possible, while still assuring that each investment is repaid by the end of <br />its required repayment period. <br /> <br />B. Results of FY 1981 Repa~ent Studies. <br />1. Repayment Study USlng Existing Firm Power Rate. Figure 6 is <br />a chart showing the cumulatlve results of the current repayment study using <br />the existing power rate. It shows that power revenues during the repayment <br />periods (1964-2090) will be sufficient to pay the annual expenses and <br />replacements, but will be insufficient to pay all interest costs and to <br />repay the ,investment costs within the a llowab 1 e time frames. The repayment <br />of power investment costs will be short by about $402 million in the <br />critical year of 2041; the repayment of the storage unit irrigation costs <br />will be short by about $30 million in the<critica1 year of 2012, and the <br />repayment of the participating projects' irrigation costs will be short by <br />about $1,631 million in the critical year of 2057. Thus FY 2057, the year <br />when the maximum repayment requirement was needed, becomes the rate-setting <br />point. <br /> <br />2. Repayment Stud~ USing Proposed Firm Power Rate. Figure 7 <br />shows the cumulative results of the revised power repayment study using the <br />proposed power rate. It shows that power revenues during the repayment <br />periods will be sufficient to pay annual expenses, replacements, and <br />interest and to repay within allowable time frames all power investment <br />costs and irrigation costs required by law to be repaid from power <br />revenues. It shows surplus revenues starting with a small amount in FY <br />2057, the rate-setting point, and building up to a total of about $464 <br />million by FY 2071. The small amount of surplus revenues occurring in FY <br />2057 is due to rounding off the proposed rate to the nearest 0.1 mill per <br />kWh and 0.5 cents per k~-month. <br /> <br />Figure 8 shows annual revenues and how they are used in the revised power <br />repayment study. Table 2 is the FY 1981 revised power repayment study which <br />contains explanatory notes for each column. The following section provides <br />detailed explanations of the repayment study data. <br />17 <br /> <br />